The Times of India today (Aug 25, 2013) has a detailed report, entitled Traders make Rs 150-crore in 4 days with hoarded onions (click on the link: bit.ly/17d5ZmZ ). It's investigation shows that traders had mopped up onions from farmers in June/July and even earlier for a price not exceeding Rs 1,500/quintals (or Rs 15/Kg) and had stored it at different places. This created an artificial scarcity.
Between Aug 9 and Aug 19, and more sharply in just four days in between, the demand peaked and the traders made a huge killing. Wholesale prices shot up to Rs 4,300/quintal on Aug 12 and then to Rs 4,500/quintal on Aug 13. That is how the entire carnage was planned and executed.
Further, the report quotes the deputy registrar of the Nasik APMC (Agriculture Produce Marketing Committee), which is the epicenter of onion production in the country. Accordingly, even now "farmers have around 2.5 lakh tonnes, of which 1.35 lakh tonnes are in the 66 villages under Lasalgaon APMC. This shows supply crunch was artificial."
Reading all this, and looking at the accompanying illustrations, I am sure your blood would boil. You would definitely want the Govt to crackdown on the trade. But look at what the Chairman of the Commission for Costs and Prices (CACP) Dr Ashok Gulati is suggesting. In an article in the Indian Express a few days back: Know your onions (Aug 22, 2013, http://m.indianexpress.com/
This makes me wonder why do we nab petty thieves and criminals. If bigger fish can be allowed to get away in the name of market reforms, why not the smaller culprits? #
To know more: Watch this NDTV India discussion on the politics of onions.